DSCR (Debt Service Coverage Ratio)
A ratio comparing a business's cash flow to its debt payments, used to assess ability to repay.
DSCR (Debt Service Coverage Ratio) measures a business’s ability to cover its debt payments with its available cash flow. It’s calculated by dividing net operating income by total debt obligations. A DSCR above 1.0 generally means a business generates more income than it needs to cover its debt payments.
Lenders often use DSCR as one factor in underwriting, particularly for larger or longer-term financing, since it gives a direct measure of repayment capacity beyond just revenue or credit score.
Related Terms
Related funding options
Ready to explore your funding options?
One application, matched to funding options across our lending network.